An integrated series of biochemical, biophysical, combinatorial, and molecular simulation experiments is presented, designed to address three fundamental questions concerning the hairpin ribozyme. First, how does the RNA fold into its native structure? Second, what are the key features of active site architecture? Third, what is the catalytic mechanism? Recent advances make it possible to answer these questions during the next funding period. These advances include: (a) development of methods to analyze folding events at the molecular and nucleobase levels, (b) demonstration that a combination of bench biochemistry and computational methods can lead to the modeling and experimental verification of specific tertiary interactions at the active site, (c) elucidation of crystal structures of the ribozyme, (d) discovery that G8 participates in metal-independent active site chemistry, and (e) the ability to execute a sophisticated 'genetic'analysis through in vitro selection. Specific Aims are: (1) Identify the structural and functional roles of specific nucleotides and functional groups implicated in catalysis and folding;(2) Isolate peudorrevertants of inactivating mutations by in vitro selection, and establish the mechanism of functional compensation;(3) Characterize and model conformational changes during the catalytic cycle, and determine which are necessary for catalytic function;(4) Develop and test models of the catalytic mechanism. The biomedical importance of this work includes (i) the advancement of our understanding of RNA structure and how it leads to catalytic activity, (ii) understanding biological reactions catalyzed by ribozymes and ribonucleoprotein complexes (including the ribosome and the spliceosome) in biological reactions, and (iii) the application of our understanding of catalytic RNA and ribozyme engineering to improving health, through functional genomics, pharmaceutical target validation, and the development of selective ribozyme based therapeutics for genetic and viral diseases.